A Call for Disclosure

The Joint Tax Committee of Congress is recommending that the federal government greatly expand the amount of financial and other information

that it releases to the public about non-profit organizations. Additional information would include:

* Results of Internal Revenue Service audits of charities.

* “Closing agreements” that non-profit organizations make with the I.R.S. after audits (or after groups admit to wrongful conduct). The agreements typically describe organizations’ previous conduct and promised changes.

* Rulings on tax issues, such as private-letter rulings and technical-advice memoranda, without deleting words that identify the groups involved.

* Applications that charities file for tax-exempt status at the time those applications are submitted.

* Forms that non-profit organizations file to report the income they receive from businesses that are unrelated to their missions and that show the taxes they owe, as well as returns filed by affiliated taxable groups.

Informational Tax Returns

The joint committee also recommended that many non-profit organizations be required to provide new information on their federal informational tax returns, called Forms 990, including:

* A detailed description of the legislation they sought to influence through a lobbying campaign and how they did it.

* The amount of money spent to influence legislation that could affect organizations’ own operations and rights.

* The dollars used for nonpartisan studies, analyses, and research that identify legislators who will be voting on issues that organizations care about.

Other Proposals

The Congressional committee also proposes to:

* Allow the I.R.S. to share information with state attorneys general and regulators about audits that are under way.

* Require the tax agency to accelerate its timetable for accepting informational tax returns in electronic form, beginning with returns filed after 2002.

* Ask the revenue service to revise the Forms 990 to ensure that the returns provide “relevant and comprehensible information” to the public and the government.

* Require charities with annual gross receipts of $25,000 or less — which do not have to file Forms 990 — to submit annual “notifications” to the I.R.S. that provide basic information, and “termination status reports” if they close.